Who is an H-1B Cap-exempt employer?

The H-1B Visa is a non-immigrant visa that permits a company to hire workers in specialty occupations.  This visa category requires that the beneficiary (the foreign worker) have a bachelor’s degree, and the petitioner (the U.S. company) can employ the worker for up to six years.

1. Cap-subject employers: These employers have to go through the so-called H-1B Lottery. There is a limited number of H-1B petitions that USCIS can adjudicate every year (65,000 Regular Cap petitions and additional 20,000 U.S. Advanced Degree Petitions). Every year, more H-1B registrations than these congressionally mandated amounts are submitted and so the government runs an H-1B lottery and randomly select H1b registrations. Cap-subject employers (most of the employers in the U.S.) have to submit an H-1B registration for the prospective employee usually in March every year, the government then runs the lottery, and if their H-1B registration is selected in the lottery, they can then file an H1b petition with USCIS. Even if the petition is approved, the earliest the H1b employee could start working for the company is October 1 of the year when the H1b registration and the H1b petition was filed.
2. Cap-exempt employers: There are certain employers that are not subject to the numerical cap. These employers do not have to go through the H-1B lottery and they can sponsor an employee for an H-1B visa at any time during the year. There is also no numerical limitation as to how many H1b cap-exempt petitions can be filed every year.

The regulations define an H-1B cap-exempt employer as:

1. An institution of higher education (as defined in section 101(a) of the Higher Education Act of 1965), or an affiliated or related nonprofit entity, or
2. Non-profit research organization or governmental research organization.

An institution of higher education is generally defined as an institution that:

• Admits as regular studentspersons having a certificate of graduation from a school providing secondary education (or the recognized equivalent of such a certificate);
• Is legally authorized within such State to provide a program of education beyond secondary education;
• Provides an educational program for which the institution awards a bachelor’s degree or provides not less than a 2-year program that is acceptable for full credit toward such a degree, or awards a degree that is acceptable for admission to a graduate or professional degree program;
• Is a public or other nonprofitinstitution; and
• Is accredited by a nationally recognized accrediting agency or association.

A nonprofit entity is related to or affiliated with an institution of higher education if it satisfies one of the following conditions:

• The entity is connected to or associated with an institution of higher education through shared ownership or control by the same board or federation;
• The entity is operated by an institution of higher education;
• The entity is attached to an institution of higher education as a member, branch, cooperative, or subsidiary; or
• The entity has entered into a formal written affiliation agreement with an institution of higher education that establishes an active working relationship between the nonprofit entity and the institution of higher education for the purposes of research or education, and a fundamental activity of the nonprofit entity is to directly contribute to the research or education mission of the institution of higher education.

A nonprofit research organization is an organization that is primarily engaged in basic research or applied research.

A governmental research organization is a federal, state, or local entity whose primary mission is the performance or promotion of basic research or applied research.

One thing to keep in mind is that not all non-profit organizations and not all government agencies will fall under the H-1B cap-exempt employer definition.

As explained above, the organizations have to be engaged either in basic research (research to gain more comprehensive knowledge or understanding of the subject under study/research that advances scientific knowledge), or applied research (research to gain knowledge or understanding to determine the means by which a specific, recognized need may be met. Applied research includes investigations oriented to discovering new scientific knowledge that has specific commercial objectives with respect to products, processes, or services).

If you are currently working for a cap-exempt employer and you want to switch and work for a cap-subject employer only, the cap-subject employer will have to go through the H-1B lottery process as outlined above. The new employer’s registration would have to first be selected in the lottery and be approved by USCIS for you to be able to start working for this employer. As mentioned above, the earliest start date would be October 1 (for example, if your H1b registration is selected in March/April 2024, the earliest possible start date would be October 1, 2024).

If you are currently working for a cap-exempt employer, you can accept a job for a cap-subject employer (assuming that it meets the H1b visa requirements), and the H1b cap subject employer does not have to go through the lottery process. You could then concurrently work for both of these employers in the U.S.

Please see our blog post on the Concurrent H-1B Cap-Exempt and Cap-Subject Employment here.

Please see our blog post on Working for multiple employers while you are in the U.S. on an H1b visa here.